Pre Session-Markets may open higher on Asian cues Analysis for May 17, 2012

The key domestic benchmarks are likely to witness a gap up opening today amid positive cues from most Asian markets. Most Asian markets rebounded from a four-month low on Thursday amid signs of a pickup in global economic recovery. Sentiment was boosted after industrial output in the US rose by 1.1 per cent in April 2012, the fastest pace since December 2010, signaling a pickup in the nation's economic recovery and boosting the outlook for Asian exporters. Moreover, minutes from the Fed meeting showed that the central bank may resort to further monetary easing to boost US economic growth. Sentiment was also boosted after Japan's economy grew more than estimated 4.1 per cent in the first quarter of 2012. The MSCI Asia Pacific Index gained 0.3 percent as of 10:23 a.m. in Tokyo, snapping a six-day losing streak. Shanghai Composite was up 0.26 per cent, Hang was up 0.27 per cent and Nikkei 225 was down 0.22 per cent. The key domestic benchmarks are likely to open higher amid firm Asian cues. Moreover, yesterday's heavy sell-offs in stocks is likely to offer good buying opportunity at lower levels.

On Wednesday, the key domestic benchmarks were jolted by a global stock market sell-off and a record low rupee as the Sensex crashed nearly 300 points as the worsening political turmoil in Greece rattled investors worldwide. The Sensex fell below the psychological mark of 16,000 for the first time in over four months for a brief period. Asian and European markets fell on Wednesday as Greece prepares to hold another election next month, amid rising speculation that the nation is set to exit the single currency, deepening Europe's debt turmoil. After witnessing a gap down opening amid weak global cues, the key domestic benchmarks extended decline amid lackluster investor sentiment. The benchmarks continued to languish deep in the red in noon trade as weak cues from European markets and a record low rupee added to the bearish sentiment. On the Sectoral front, the Metal and Auto shed 2.68 per cent and 2.59 per cent, respectively.

BSE SENSEX closed at 16,030.09, down by 298.16 points or by 1.83 per cent and the NSE Nifty ended at 4,858.25, down by 84.55 points or by 1.71 per cent. The BSE Sensex touched intraday high of 16,132.68 and intraday low of 15,974.6 The NSE Nifty touched intraday high of 4,882.25 and intraday low of 4,837.05. The BSE MIDCAP closed at 5,879.42, down by 46.35 points or by 0.78 per cent, while the BSE SMLCAP ended at 6,264.95, down by 70.32 points or by 1.11 per cent.

US stock markets ended lower on Wednesday amid concerns that Europe's debt woes are deepening. Sentiment weakened after the European Central Bank said that it will temporarily stop lending to some Greek banks as it aims to limit its risk to the ongoing political impasse in Greece. Stocks also fell after the Federal Reserve said that further monetary easing may be necessary in the US as it warned that a worsening debt turmoil in Europe and fiscal tightening in the US were the two biggest risks to US growth. The Fed's statement signaled a slowing US economy. However, the losses in stocks were curbed by robust US economic data which signaled a pickup in US economic recovery. Industrial output in the US rose by 1.1 per cent in April 2012, the fastest pace since December 2010, while housing starts rose 2.6 percent to a 717,000 annual rate in April 2012 from March's revised 699,000 pace. Financials and Materials shed 1.5 per cent and 1.2 per cent, respectively.

The Dow Jones Industrial Average ended down 0.26 per cent or 33.45 points at 12,598.55, Nasdaq closed down 0.68 per cent or 19.72 points at 2,874.04 and the S&P 500 ended lower by 0.44 per cent or 5.86 points at 1,324.80.

The FII's on Wednesday stood as net sellers in equity but net buyers in debt. Gross equity purchased was Rs 1,834.30 crore and gross debt purchased stood at Rs 463.90 crore. Gross equity sold was Rs 1,970.20 crore and gross debt sold stood at Rs 373.50 crore. Net investment in equity and debt was Rs (135.90) crore and Rs 90.40 crore respectively.

Top traded volumes on the NSE Nifty were Tata Motors Ltd. 230,45,441, Jaiprakash Associates Ltd. 162,48,489, Hindalco Industries Ltd. 101,60,344, Housing Development Finance Corporation Ltd. 80,30,140 and Infrastructure Development Finance Company Ltd. 73,74,944.00.

On NSE, total number of shares traded was 64.69 crore with a total turnover of Rs 10,549.60 crore.

In the NSE F&O segment, total number of contracts traded in index futures was 523,890 with a total turnover of Rs 11,872.59 crore and total number of contracts traded in stock futures stood at 509,833 with a total turnover of Rs 11,890.40 crore. Total number of contracts traded in index options was 38,48,831 with a total turnover of Rs 95,164.97 crore and total number of contracts traded in stock options was 197,134 with a total turnover of Rs 4,844.49 crore.